New Delhi, June 18: India has no problem with setting up a working group on Kashmir during the second round of Foreign Secretary-level talks with Pakistan beginning in Islamabad on Friday, as long as it is part of a package that includes working groups on other issues of mutual concern.

``India acknowledges that Kashmir is a dispute between the two countries, as is obvious from the Shimla Agreement. Setting up a joint working group on this issue will, in fact, give us the opportunity to discuss the entire State of Jammu & Kashmir, including Pakistan-Occupied Kashmir,'' highly-placed sources said.

The Indian team, led by Foreign Secretary Salman Haidar leaves for Islamabad tomorrow, some time after the hotline between the two Prime Ministers of India and Pakistan is revived in the morning. Prime Ministers I K Gujral and Nawaz Sharif's conversation over the phone is expected to set the pace and tenor of the talks that effectively begin the next day.

The talks are a direct outcome of Prime Ministerial directives from both sides of the border. At the Male South Asian Association for Regional Cooperation (SAARC) summit in mid-May, the Foreign Secretaries of India and Pakistan were directed to evolve the ``structure, composition and functioning of the working groups'' on issues of mutual concern.

New Delhi feels that setting up a number of working groups, including one on Kashmir, will significantly help in pushing development in both the countries.

Other groups could be on trade and economic cooperation, enhanced people-to-people contact, visa relaxation, nuclear issues, Sir Creek area, Tulbul barrage, etc.

``Setting up a working group on Kashmir will help India raise the issue of Pakistani-funded terrorism in the Valley. It will give us a platform to give evidence of the proxy war that has been sustained by Islamabad since 1989. It will also give us the opportunity to raise human rights abuses in Pakistan-Occupied Kashmir,'' the sources said.

Once the dialogue gets off the ground and ``mutual trust and confidence'' begin to get established, it could lead towards military confidence-building measures, and in time, even thinning of troops in the Valley.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.